The Secret to Investing
The secret to investing is complex. There is no silver bullet, there is no pill to take, there is no hot new stock, etc. Everyday we are bombarded by advertisers trying to sell us quick fixes to complex problems. I'm sure we've all fell victim to to the silver bullet solution once or twice before. I know for myself, it's happened more times than I would like to admit. So if there is no silver bullet for investing then what is the secret to investing?
What is Investing?
According to Nick Murray and his book Simple Wealth Inevitable Wealth,
“Investing is like planting a tree, you plant it in the earth, and a wonderful force of nature (compound interest) causes it to take root, and to grow. You don’t have to do much with it: the air and the water and the nutrients it needs are all around the tree, and it knows how to use them.
You don’t dig it up every ninety days to check on its progress, nothing much will have changed in that brief time and you might harm the tree. You don’t uproot the tree and store it in the garage over the winter, to protect it from what you regard as bad weather. Though it’s leaves die and it stops growing for a season, the tree itself does not die.
Even leafless, the tree is still producing oxygen, without which you and I could not live. Give the tree enough room, enough light, enough time. Then leave it pretty much alone. It will give you back air and shade and beauty as it grows and will go on doing so for your children after you’re gone”
At 80/20 Financial Services, just like the above passage states, we believe that investing should be looked at as a long term goal. Much like planting a tree.
At 80/20 Financial Services we believe investing should be a strategy to help you reach your goals.
- That real wealth, an income one doesn’t outlive, can only be achieved through a program of lifetime investing in quality equities. i.e. stocks and mutual funds
- That mainstream equities historically create lifetime retirement income which rises through time and rises significantly higher than consumer inflation.
- That the achievement of real wealth in equities is not driven by investment “performance” but by investor behavior. We believe in making a lifetime plan and sticking to it, ignoring both bull market fads and bear market panic.
- That, in practice, no one will ever be able to resist the great behavioral traps of equity investing without a high quality advisor.
- That the highest, best and most valuable function of an advisor is guiding clients past The Big Mistake, in all of its several manifestations.
- That therefore your behavioral investment counseling alone is worth multiples of what the client pays for it.
The Real Secret to Investing
Many people think the secret is the "right" adviser picking the "right" investments for you. The real secret to long term investing success is the adviser keeping you from making costly mistakes. That's the secret to investing.
Think of us as an insurance plan for your retirement nest egg. Except, unlike most insurance plans, we protect you before a disaster strikes, not after a disaster strikes.
You Need A Plan
A goal of retiring - without a plan to get there - is simply a plan to never retire. Retirement isn't some magical age. It's a dollar amount. If you're age 50 or over and still in the accumulation phase (pre-retirement) we can help you figure out where you need to go and how to get there. If you are retired or nearing retirement, we can create a plan which will outpace inflation and possibly leave a legacy to your family. The consultation is free and without obligation. Contact us to set up a consultation.
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Thanks for reading!
80/20 Financial Services is an independent Registered Investment Advisory Firm. We help clients age 50 and over plan their retirement income and investment strategies. Contact us today for help with your retirement needs.